Sony Execs Discuss Possibility of Further Studio Acquisitions, What They Learned From Bungie, & More

Sony chief executive officer Kenichiro Yoshida and chief financial officer Hiroki Totoki talked about the PlayStation business.

[Orchard]

It’s basically a given that Sony and MS will make more studio acquisitions once their pending acquisitions close.

Nintendo is the only one of the big three who won’t be making acquisitions.

[Majin-vegeta]

Idk they recently acquired something..
https://www.nintendolife.co...

*Yakuza 0 intensifies*

[Knightofelemia]

Nintendo buying up Monolith Soft was a surprise back in 2007. Nintendo might sing a different song and tune when it comes to gaming then what Sony and Microsoft sing but in the end it pays off.

[SeTTriP]

Nintendo don't need third-party support.they clearly demonstrate this every gen

[tehpees3]

They have been buying companies. They have just not (currently) bought major companies like MS or Sony. Doesn't mean to say it won't happen. TBH MercurySteam is the only other one I see them buying though.

[shinoff2183]

Im glad nintendo isnt buying anything.

[S2Killinit]

I think after how much MS spent on a publisher, they are pretty much stuck with what they got as far as new studios. Sony on the other hand may purchase new studios and bring them under its own publishing house.

[Orchard]

MS have bucketloads of cash. But the reality is neither company can acquire anything until the pending acquisitions go through federal review.

[S2Killinit]

MS cant justify any more purchases.

[Orchard]

Justify to who? They can spend their money however they want. And both MS and Sony have said they are not done with acquisitions.

[S2Killinit]

MS has not said anything like that. And justify their pocket. MS has now lost more money than they have made in their entire existence in gaming after that 60 billion acquisition. Even MS cant justify being in the red after 4 generations.

[Orchard]

They just opened up a role for someone to identify targets for acquisitions ( https://www.videogameschron... - they are not done. Neither are Sony.

That being said, we won't see any new acquisitions from either while the existing ones are still under Federal review.

"Even MS cant justify being in the red after 4 generations."

Huh? MS is not in the red at all...

[S2Killinit]

So they havent said anything, they’ve hired someone to identify targets which could be for any number of reasons. There has been no statements if intent to soend. Ore on acquisitions at this point.

Huh, MS’s gaming is in the red with that acquisition.

[Orchard]

MS Gaming is not an entity, nor does it have a stock price or anything. And MS generates revenue roughly equivalent to an Activision purchase every 3 months... the parent company resources are what matters, same with PS + Sony.

So while there's no point in going back n forth here because neither of us can see the future. I will place a prediction though, that as above, we will see more acquisitions by both Sony and MS within 12 months of the current pending acquisitions closing out.

[S2Killinit]

Hehehe sure buddy. You trying wayyy too hard. Fact is, their gaming has not been profitable. It makes it more difficult to justify even more purchases.

[Orchard]

Nothing to try. It's clear that both companies are going to keep making acquisitions.

By your logic of split resources etc, Xbox wouldn't have had $70bn to acquire Activision, same with PS & Bungie - but they both happened.

[S2Killinit]

Except you already said that, and you are dead wrong.

[Orchard]

So MS & Sony are never going to acquire anyone else? That seems very unlikely.

[S2Killinit]

MS isn’tt thats for sure. Not for a long time.

[Orchard]

@S2Killinit Speculation. People said the same when Zenimax happened, and then Activision happened.

You and I would've both said they would never buy Zenimax, and definitely not Activision.

That being said, we won't see another Activision sized acquisition, or anything close, from both Sony and MS for a very long time, if ever. They will both make smaller purchases in the hundreds of millions to few billions max.

[S2Killinit]

Nobody said that after zenimax. I definitely did not and would not say that knowing how far MS first party was compared to Sony. It makes sense for MS to cannibalize the industry considering they did not build anything in house after three generations. In fact, I always said that MS relied on buying games at the beginning of each generation and then ran dry toward the end of each generation when it became too expensive to buy exclusives. You see, MS thought they could buy their exclusives because they thought that with the right purchase they could kill the competition. This strategy backfired when Sony demolished them in install base, making it too expensive, too fast, for MS to buy exclusives leading to the embarrassment that is the Xbox One generation. THIS is why MS had to spend so big to buy a publisher, not a dev, a publisher! Because MS never believed that making games was all that important to being a games console manufacturer. MS thought they were too big to worry about learning how to make and publish games, thats why they ran their own publishing house, and devs, into the ground while Sony believed that console platform holder was first and foremost about making games as an art form. So, MS’s purchase of a publisher is not a show of strenght, its a show of how badly they miscalculated, and the need to buy their way into another chance to compete.

[Orchard]

This wall of unformatted text just reads like a rant at this point.

None of what you said would suggest MS and Sony will or will not make more acquisitions in the future (obviously they will, they're both huge corporations and are now in an acquisition war).

Whether Zenimax and Activision is a show of strength or miscalculation is irrelevant to us as gamers at this point. The end result is the same, Most, if not all, Zenimax and Activision titles are going to be exclusive to MS platforms and on Game Pass day 1.

[S2Killinit]

I know its too factual for you, but we all know how MS ended up in the position of selling half as many consoles as Sony. They went into a state of emergency and were forced to spend billions (more than they ever made in 4 generation of gaming) just to be able to compete. Thats how badly they managed. They had to buy a new publishing house, because their own couldnt compete as it had been ran into the ground. The once world renowned dev Rare is a shadow of what it was before MS , which makes you worried about how MS may manage whatever other devs they go and buy. Now MS is behind in VR too. They will have to spend more there but that wont be for some time as they are too behind in game dev to diversify their attention. Currently their gaming department is on fire and the fire needs to be put out first. Hopefully they can offer some actual proper games in the future other than Halo, gears, forza. Its actually quite bad how MS mismanaged things.

[DOMination-]

The future direction of gaming is inevitable. And because of that, I hope gaming becomes more centralised. With the cost of Bungie, Sony could buy 15 small studios. I really think by the end of this generation, both Sony and MS should be aiming for 100+ studios.

As services and digital takes over, a stream of quality content will become more important. You can either do that by having your 15 teams churning out a game every year like back in the PS2 days or you can have your teams spend a couple of years making quality but with the sheer amount of studios, you'll still have a new game every month.

IMO this is the endgame for Embracer (either that, or they flip the entire business and it ups up with MS anyway as I doubt Sony could afford them now).

Ultimately, I don't give a F about the independence of studios if it means the brilliant people that work there have financial stability. If Sony, Nintendo or MS don't snap them up, they will probably end up owned by Amazon, Google, Apple or somebody in China or the Middle East anyway and there's definitely history there to make the argument that those options are worse.

I'd rather have 10 Obsidians or Insomniacs than one mega studio like 343i or The Initiative.

I appreciate many will see this is a "bad take"

[Eonjay]

I think having 100 studios would do nothing but create quantity over quality. And this doesn't seem sustainable for something like GamePass. The funding each company would receive would probably limit what the studios could actually do. Plus regardless of what you feel about the console war, I doubt many people want to see two corporations control 200 studios giving us 3 Embracer Groups with 300 studios between them.

[CantThinkOfAUsername]

If subs and digital are inevitable then the best course of action is to sell games normally at full price for the first four-eight weeks when sales matter and offer the game in a subscription to those who'd rather wait or buy cheap.

I really dislike consolidation. It rarely if ever turns out well for the companies being bought.

[gangsta_red]

How would the funding be limited? Especially when these services are getting a steady stream of annual, sometimes monthly payments by their subscribed users? This is a talking point strictly from Sony and I wouldn't equate that to the others that are trying to do the same.

And this quantity over quality take is subjective. Of course not everything a sub service would offer would be appealing to certain people but that would hardly count as "quantity over quality". I can find a good number of games on GP that I would play that others probably wouldn't be into and vice versa.

So far we have seen studios get bought up and still be able to do the games they wanted to do with the same type of freedom from being independent. But now they have a bigger budget and a wider audience, Supermassive Games and Double Fine instantly comes to mind when discussing studios that benefited from being purchased.

I think the days of being bought up and then being strictly told what to make and what to do is over.

[Eonjay]

@gangsta_red

"How would the funding be limited?"
By pure math. If you have 100 studios, and 25 million subscribers paying $180 dollars a year on subscriptions, then on average you have less than 50 million per studio to invest and obviously more for some studios and obviously less for other studios. So many of those 100 studios will only be able to put out certain levels of content. Their projects will be limited. And so the content of the subscription is more quantity than quality. I see this trend in all content subscriptions.

Keep in mind this is just one form of content monetization. Mileage will vary for different developers and what you said about studios like Double Fine and Super Massive is also completely true and valid.

"I think the days of being bought up and then being strictly told what to make and what to do is over."
I disagree. I think thats what buying 100 studios will ensure. I believe that the vast majority of studios would not have unlimited budgets and those studios would be relegated to certain tier projects. But I also think that approach is necessary for an orginzation that large to function and budget for.

[gangsta_red]

@eonjay

Where exactly are you getting your numbers on how much a publisher is allocating money from for each of their developers?

"Keep in mind this is just one form of content monetization"

Okay, but this now totally invalidates your previous calculations. Because all your doing is speculating. We would definitely need to actually know what publishers are giving their devs to see if their purchases are having any negative effects on the budget. Because as of right now and in the past, developers have only grown when purchased.

"I think thats what buying 100 studios will ensure"

We'll definitely have to wait and see, but we're already seeing studios doing bigger things outside of their normal type of games made. Playground is doing Fable, Undead Labs is reportedly doing a bigger State of Decay 3, InXile is supposedly doing a FPS RPG, Insomniac is making a huge GaaS multiplayer game.

All outside their normal type of games they stuck with in the past.

Now I do agree that they'll probably be some studios purchased that will stick with smaller games. But I don't think it will be because they can't get the funding, it's just that will be their specialty. And I'm sure they will be given the chance to do something big if they want.

[shinoff2183]

I wouldve loved if sony would buy an rpg studio preferably a jrpg studio but i wouldve been thrilled as shit if they were the ones to buy inxile.

[shinoff2183]

@Michiel1989

Sony doesnt get a pass from everyone. I dont like that they bought bungie i wouldve been way happier with square or konami or capcom. Bungie though👎

[FanboysKiller]

Could we stop bragging about acquisitions for a minute please? No tangible benefits seen yet means the generation haven't started yet , what a shame.